The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The useful life ofthe equipment is 10 years. Initial cost of equipment is $30.000. Expected annual cash flows from new equipment is 75.000. Annual cash Outflows are:Cost of ingredients: $45,000; Salaries expenses: $13,500; Maihtenance expenses: $1,500. Depreciation expense: $5,000. In that case what is paybacktime (as years) for this equipment?171800O A) 2,0O B) 3,5O C) 5,0O D) 4,0O E) 3,0

Payback period means the period when we get back our investment amount. Formula for payback period…

The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The useful life of the equipment is 10 years. Initial cost of equipment is $30.000. Expected annual çash flows from new equipment is 75.000. Annual cash Outflows are = Cost of ingredients: $45,000 ; Salaries expenses: $13,500; Maihtenance expenses: $1,500. Depreciation expense: $5,000. In that case what is payback time (as years) for this equipment? O A) 2,0 170 O B) 3,5 O C) 5,0 OD) 4,0 O E) 3,0

The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The useful life of the equipment is 10 years. Initial cost of equipment is $30.000. Expected annual çash flows from new equipment is 75.000. Annual cash Outflows are = Cost of ingredients: $45,000 ; Salaries expenses: $13,500; Maihtenance expenses: $1,500. Depreciation expense: $5,000. In that case what is payback time (as years) for this equipment? O A) 2,0 170 O B) 3,5 O C) 5,0 OD) 4,0 O E) 3,0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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